Payments giant Visa’s $5.3 billion offer to acquire faces heightened antitrust scrutiny at the US Justice Department, which voiced concerns over nascent competition in the payments sector. The Wall Street Journal first reported the news Tuesday, citing people familiar with the matter.
According to the WSJ report, the watchdog may decide to sue to block Visa’s acquisition of Plaid, which claims to connect more than 200 million consumer accounts with 11,000 banks. The company counts high-profile customers like Betterment, Venmo, and also top US cryptocurrency exchanges, including Coinbase and Gemini.
US antitrust authorities have recently stepped up regulatory scrutiny of payment and Fintech giants, on the lookout for monopolistic behavior. Sources said the department put the deal under closer watch and was concerned it could limit competition in the payments sector.
It’s not clear yet if any of Visa rivals complained about its offer to buy the Fintech, which also lined up Mastercard, Citi and American Express as early investors.
The move is the result of investigations by US top , which are quietly preparing for potential litigation following the end of its preliminary review, including lining up witnesses for a trial. The last moves from the government’s twin watchdogs, which spent nearly 10 months probing the deal, also come as Plaid reportedly connects nearly quarter of US bank accounts through an app of one of its clients.
Visa, however, promoted its acquisition of Plaid, which launched in 2013, as an important development in and control over how their financial data is used. Beyond this, the company said it expects the takeover to increase its net revenue by at least one percent in 2021.
For its part, Plaid co-founders Zach Perret and William Hockey said that involving the Visa brand would help their company scale its products and global footprint.
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